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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No.           )

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

Check the appropriate box:

REYNOLDS CONSUMER PRODUCTS INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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Reynolds Consumer Products Inc.

1900 W. Field Court

Lake Forest, Illinois 60045

NOTICE OF 2021 ANNUAL MEETING OF STOCKHOLDERS

Notice is hereby given that the 2021 Annual Meeting of Stockholders of Reynolds Consumer Products Inc. will be held on Tuesday, May 25, 2021, at 4:00 p.m. Central Time.

The Annual Meeting will be completely virtual. You may attend the meeting, submit questions, and vote your shares electronically during the meeting via live webcast by visiting www.virtualshareholdermeeting.com/REYN2021 and entering the 16-digit control number included on your proxy card or on the instructions that accompanied your proxy materials. Instructions on how to attend and participate in the Annual Meeting via the webcast are posted on this site as well.

The purposes of the meeting are the following:

Only stockholders of record at the close of business on March 31, 2021 will be entitled to vote at the meeting and any adjournment or postponement thereof.

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Cautionary Note Regarding Forward-Looking Statements

The statements included in this proxy statement regarding future performance and results, expectations, plans, strategies, priorities, commitments and other statements that are not historical facts are forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are based upon current beliefs, expectations and assumptions and are subject to significant risks, uncertainties and changes in circumstances that could cause actual results to differ materially from the forward-looking statements. A detailed discussion of risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020. Readers of this proxy statement are cautioned not to place undue reliance on these forward-looking statements, since there can be no assurance that these forward-looking statements will prove to be accurate. We expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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PROXY STATEMENT SUMMARY

Our Board of Directors (the “Board of Directors” or “Board”) has made this Proxy Statement and related materials available to you on the internet, or at your request has delivered printed versions to you by mail, in connection with the Board of Directors’ solicitation of proxies for our 2021 Annual Meeting of Stockholders (the “Annual Meeting”), to be held on Tuesday, May 25, 2021, at 4:00 p.m. Central Time, in a virtual meeting format only, and any adjournment of the Annual Meeting. If you requested printed versions of these materials by mail, they will also include a proxy card for the Annual Meeting.

Pursuant to rules adopted by the Securities and Exchange Commission (“SEC”), we are providing access to our proxy materials over the internet. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials (the “Notice”) to our stockholders of record and beneficial owners as of the record date identified below. The mailing of the Notice to our stockholders is scheduled to begin on or about April 12, 2021.

This summary highlights information contained elsewhere in this proxy statement. It does not contain all of the information you should consider, and we urge you to read the entire proxy statement, as well as our 2020 Annual Report, before voting.

IMPORTANT NOTICE REGARDING THE INTERNET AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL STOCKHOLDERS MEETING TO BE HELD ON MAY 25, 2021: This Proxy Statement and our 2020 Annual Report to Stockholders are available at www.proxyvote.com.

VOTING MATTERS AND BOARD RECOMMENDATION

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DIRECTOR NOMINEES AND CONTINUING DIRECTORS

CORPORATE GOVERNANCE HIGHLIGHTS

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EXECUTIVE COMPENSATION BEST PRACTICES

We annually evaluate all elements of our named executive officers (“NEOs”) pay to ensure alignment with performance objectives, market best practices and stockholder interests. The following summarizes our current practices.

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Proposal 1: election of directors

Our Board of Directors is presently comprised of eight directors, divided into three classes serving staggered three-year terms. The term of the Class I directors expires at our 2021 Annual Meeting of Stockholders, the term of the Class II directors expires at our 2022 Annual Meeting of Stockholders, and the term of the Class III directors expires at our 2023 Annual Meeting of Stockholders. The current members of each class of directors is as follows:

We have entered into a Stockholders Agreement (the “Stockholders Agreement”) with Packaging Finance Limited (“PFL”) which, among other things, provides that PFL has the right to nominate all of our directors so long as the Hart Entities (as defined in the Stockholders Agreement) beneficially own at least 50% of the outstanding shares of our common stock; a majority of our directors so long as they own at least 40% of our stock; and at least one director so long as they own at least 10% of our stock.  Currently, PFL has the right to nominate all of our directors, and all of our directors were nominated by, and may be removed by, PFL. Based on the recommendation of the Compensation, Nominating and Corporate Governance Committee (the “CNG Committee”) and designated by PFL, the Board has nominated Thomas Degnan, Helen Golding and Allen Hugli for election as directors at the 2021 annual meeting, to serve until the 2024 annual meeting of stockholders.

Proxies cannot be voted for a greater number of persons than three, the number of nominees named in this proxy statement. We expect each nominee for election as a director will be able to serve if elected. If any nominee is not able to serve, proxies will be voted in favor of the remainder of those nominated and may be voted for substitute nominees.

Set forth below is biographical information as of March 31, 2021, for the nominees and each person whose term of office as a director will continue after the Annual Meeting. There are no family relationships among our executive officers or directors.

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Board of Directors’ Recommendation

The proposal for the election of directors relates solely to the election of the directors nominated by the Board of Directors.

The Board of Directors recommends that stockholders vote FOR the election of
the three director nominees, Thomas Degnan, Helen Golding and Allen Hugli.

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CORPORATE GOVERNANCE

Director Independence

We are a “controlled company” under the rules of the Nasdaq Stock Market LLC (“Nasdaq”).  As a result, we qualify for exemptions from, and have elected not to comply with, certain corporate governance requirements under the rules, including the requirements that within one year of the closing of our initial public offering (“IPO”) we have a Board that is composed of a majority of “independent directors,” as defined under the Nasdaq rules, and a compensation and nominating committee that is composed entirely of independent directors.  

Even though we are a controlled company, we are required to comply with the rules of the SEC and Nasdaq relating to the membership, qualifications and operations of the Audit Committee.  As a newly-public company, we were able to, and did, rely on an exemption from the requirement that all members of the Audit Committee be independent directors for a period of one year after our IPO, and Mr. Cole, a non-independent director, served on the Audit Committee from the date of our IPO until January 27, 2021. Currently, all members of the Audit Committee are independent directors.

Our Board of Directors has determined that Ms. Gottschalk, Mr. Noll and Ms. Ziegler are independent directors under Nasdaq rules.  In making such independence determination, the Board of Directors considered the relationships that each such non-employee director has with our Company and all other facts and circumstances that the Board of Directors deemed relevant in determining their independence.

Board Leadership Structure

The positions of our Chairman of the Board and Chief Executive Officer are presently separated. Separating these positions allows our Chief Executive Officer to focus on our day-to-day business, while allowing the Chairman of the Board to lead the Board of Directors in its fundamental role of providing advice to, and oversight of, management. Our Board of Directors recognizes the time, effort and energy that the Chief Executive Officer must devote to his position in the current business environment, as well as the commitment required to serve as our Chairman, particularly as the Board of Directors’ oversight responsibilities continue to grow. Our Board of Directors also believes that this structure ensures a greater role for the non-management directors in the oversight of our Company and active participation of the independent directors in setting agendas and establishing priorities and procedures for the work of our Board of Directors. Although our By-Laws and Corporate Governance Guidelines do not require our Chairman of the Board and Chief Executive Officer positions to be separate, our Board of Directors believes that having separate positions is the appropriate leadership structure for the Company at this time.

Stockholder Communications

A shareholder or other interested party may submit a written communication to the Board of Directors by sending it to the Board in care of Corporate Secretary at Reynolds Consumer Products, 1900 West Field Court, Lake Forest, IL 60045 Attention: Corporate Secretary. The Corporate Secretary will send copies of all communications to the Chairman and Chief Executive Officer and, when appropriate, to all Board members.  

Procedures for Selecting and Nominating Director Candidates

The CNG Committee Charter adopted in 2020 provides:

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Pursuant to the Stockholders Agreement between the Company and PFL, PFL has the right to nominate all of our directors so long as the Hart Entities (as defined in the Stockholders Agreement) beneficially own at least 50% of the outstanding shares of our common stock; a majority of our directors so long as they own at least 40% of our stock; and at least one director so long as they own at least 10% of our stock.  Currently, PFL has the right to nominate all of our directors, and all of our directors were nominated by, and may be removed by, PFL.

The Company’s Bylaws include provisions for nomination and election of directors at the annual meeting of stockholders and requirements for director nominees.  

The CNG Committee will consider director candidates recommended by stockholders in the same manner that it considers all director candidates. Stockholders who wish to suggest qualified candidates should write to Reynolds Consumer Products, 1900 West Field Court, Lake Forest, IL 60045 Attention: Corporate Secretary. Any such recommendation should include a description of the candidate’s qualifications for board service; the candidate’s written consent to be considered for nomination and to serve if nominated and elected; and addresses and telephone numbers for contacting the stockholder and the candidate for more information.

Board Meetings and Committees

Our Board of Directors held seven meetings during 2020. The independent directors regularly hold executive sessions at meetings of the Board of Directors. During 2020, each of the directors then in office attended at least 75% of the aggregate of all meetings of the Board of Directors and all meetings of the committees of the Board of Directors on which such director then served. Directors are encouraged to attend the annual meetings of stockholders of the Company, as provided in our Corporate Governance Guidelines.

During 2020, our Board of Directors had two standing committees: the Audit Committee and the CNG Committee. The following sets forth the membership of each of our committees as of March 31, 2021:

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Audit Committee

The members of our Audit Committee are Ms. Gottschalk (Chair), Mr. Noll and Ms. Ziegler. The composition of our Audit Committee meets the requirements for independence under the current Nasdaq listing standards and SEC rules and regulations. Each member of our Audit Committee is financially literate. In addition, our board of directors has determined that Ms. Gottschalk is an “Audit Committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-K promulgated under the Securities Act of 1933, as amended (the “Securities Act”). This designation does not impose any duties, obligations or liabilities that are greater than are generally imposed on members of our Audit Committee and our board of directors. Our Audit Committee is directly responsible for, among other things:

The Audit Committee held four meetings during 2020. The Audit Committee operates under a written charter approved by the Board, a copy of which is available in the “Investors—Corporate Governance—Documents and Charters” section of our website at www.reynoldsconsumerproducts.com.

Compensation, Nominating and Corporate Governance Committee

The members of our CNG Committee are Mr. Degnan (Chair), Mr. Cole and Mr. Noll.  Our CNG Committee is responsible for, among other things:

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The CNG Committee held five meetings during 2020. The CNG Committee operates under a written charter approved by the Board, a copy of which is available in the “Investors—Corporate Governance—Documents and Charters” section of our website at www.reynoldsconsumerproducts.com.

Risk Oversight

Our Board of Directors oversees the management of risks inherent in the operation of our business and the implementation of our business strategies. Our Board of Directors performs this oversight role by using several different levels of review. In connection with its reviews of the operations and corporate functions of our Company, our Board of Directors addresses the primary risks associated with those operations and corporate functions. In addition, our Board of Directors reviews the risks associated with our Company’s business strategies periodically throughout the year as part of its consideration of undertaking any such business strategies.

Each of our Board committees also coordinates oversight of the management of our risk that falls within the committee’s areas of responsibility. In performing this function, each committee has full access to management, as well as the ability to engage advisors. Our Chief Financial Officer is responsible for identifying, evaluating and implementing risk management controls and methodologies to address any identified risks. In connection with its risk management role, our Audit Committee meets privately with representatives from our independent registered public accounting firm, and privately with our Chief Financial Officer. In addition, the CNG Committee reviews the Company’s compensation program and risk elements to the Company in connection with the structure of the compensation plan.

Board Evaluations

The Company intends to implement a Board of Directors evaluation process in 2021.

Environmental, Social & Governance Matters

Management recognizes the importance of Environmental, Social & Governance matters to all stakeholders and has reviewed and discussed with the Board the Company’s development of its Environmental, Social & Governance framework.  Management will continue to provide regular updates to the Board while also providing regular updates to Company stakeholders.  Additional information about the Company’s Environmental, Social & Governance actions, goals and initiatives is included in our 2020 Annual Report to Stockholders, which is being provided as part of the proxy materials and is available on our corporate website at www.reynoldsconsumerproducts.com.

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DIRECTOR COMPENSATION

Beginning in 2020, our directors who are not employees of our company or of Rank Group or PEI (the “non-affiliated directors”) received the following annual retainers and annual equity compensation grants:

RSUs are granted pursuant to the Reynolds Consumer Products Inc. Equity Incentive Plan (the “Equity Incentive Plan”) and the number of RSUs granted is calculated by dividing the applicable dollar value by the closing sale price per share of our common stock on the date of grant. The RSUs granted in 2020 to our non-affiliated directors were granted to Ms. Gottschalk and Mr. Noll on March 5, 2020 and vested in full on the first anniversary thereof, and were granted on a prorated amount to Ms. Ziegler on September 22, 2020 when she was appointed to the Board and vest in full on the first anniversary thereof.

We plan to grant RSUs and make the annual cash retainer payments to non-affiliated directors on the date of the annual meeting of stockholders in each year, beginning in 2022.  For 2021, as a transition year, the RSUs were granted, and the cash retainer amounts (adjusted to reflect standardizing payment dates, moving Mr. Degnan and Ms. Ziegler from January to April and Ms. Gottschalk and Mr. Noll from February to April) were paid, to non-affiliated directors (Mr. Degnan, Mr. Noll, Ms. Gottschalk and Ms. Ziegler) on April 1, 2021. The RSUs will vest in full on April 1, 2022, subject to continued service.

Directors who are also full-time officers or employees of the Company receive no additional compensation for serving as directors. An individual who is a non-employee director may not receive awards, in cash or otherwise, for any calendar year that total more than $750,000 in the aggregate.

We also reimburse all of our directors for their reasonable expenses incurred in attending meetings of our Board of Directors or committees, and have entered into Indemnification Agreements with our directors.

The following table presents the compensation for each person who served as a member of our Board of Directors during 2020, other than Mr. Mitchell. Mr. Mitchell, who is also our Chief Executive Officer, receives no compensation for his service as a director. The compensation received by Mr. Mitchell as our Chief Executive Officer during 2020 is presented in the 2020 Summary Compensation Table. Mr. Cole, Mr. Degnan and Ms. Golding did not receive any compensation for his or her service as a director of ours in 2020, due to the fact that they were serving as officers of Rank Group or PEI at the time of payment or grant.

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2020 Director Compensation Table

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PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee has appointed PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2021. Our Board of Directors recommends that stockholders vote for ratification of this appointment. If this proposal is not approved at the Annual Meeting, the Audit Committee will reconsider its appointment, but may decide not to direct the appointment of a different independent registered public accounting firm. Even if the appointment is ratified, the Audit Committee may, in its discretion, direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in our stockholders’ best interests.

PricewaterhouseCoopers LLP has audited our financial statements for each year since 2015. We expect representatives of PricewaterhouseCoopers LLP to be present at the Annual Meeting and available to respond to appropriate questions. They will have the opportunity to make a statement if they desire to do so.

Board of Directors’ Recommendation

The Board of Directors recommends that stockholders vote FOR ratification of the appointment of
PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2021.

AUDIT MATTERS

Auditor Fees

The following table presents fees for professional audit services rendered by PricewaterhouseCoopers LLP for the years ended December 31, 2020 and 2019:

The Audit Fees for 2020 were for professional services rendered for the audits of the Company’s annual consolidated financial statements and quarterly consolidated financial statements. The All Other Fees for 2020 were for an internal control design assessment project. The Audit Fees for 2019 were for professional services rendered for the audits of the Company’s annual combined financial statements and quarterly combined financial statements. In addition, 2019 also included audit fees for professional services rendered in relation to the review of our registration statement and other documents filed with the SEC.

All audit services rendered by PricewaterhouseCoopers LLP in 2020 and 2019 were approved by the Audit Committee, which considered whether the provision of all services was compatible with maintaining PricewaterhouseCoopers LLP’s independence.

Pre-Approval Policy

The Audit Committee has adopted a policy with respect to pre-approval of certain types of audit and non-audit related services specifically described by the Audit Committee on an annual basis.  In general, the Audit Committee has pre-approved the provision of certain audit services and audit-related services, in each case up to an annual amount which varies by the type of services.  Individual engagements anticipated to exceed such pre-established thresholds must be

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separately approved.  This policy also sets forth certain services that the Company’s independent public accountant is prohibited from providing to the Company.  The policy authorizes the Audit Committee to delegate to one or more of its members pre-approval authority with respect to permitted services.  

All services provided and fees charged by PricewaterhouseCoopers LLP to us were pre-approved in accordance with the policy described above.

AUDIT COMMITTEE REPORT

The Audit Committee has reviewed and discussed with management and PricewaterhouseCoopers LLP the audited financial statements for the year ended December 31, 2020. The Audit Committee has discussed with PricewaterhouseCoopers LLP the matters that are required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (United States) (“PCAOB”) and the SEC. The Audit Committee has received the written disclosures and the letter from PricewaterhouseCoopers LLP required by applicable requirements of the PCAOB regarding PricewaterhouseCoopers LLP’s communications with the Audit Committee concerning independence, and the Audit Committee has discussed with PricewaterhouseCoopers LLP that firm’s independence. The Audit committee has concluded that PricewaterhouseCoopers LLP’s provision of audit and non-audit services to the company and its affiliates is compatible with PricewaterhouseCoopers LLP’s independence.

Based on the reviews and discussions described above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2020 for filing with the SEC.

Audit Committee

Marla Gottschalk, Chair

Richard Noll

Ann Ziegler

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Proposal 3: advisory vote to approve the compensation of the named executive officers

We are providing our stockholders the opportunity to cast an advisory (non-binding) vote to approve the compensation of our named executive officers as disclosed in this Proxy Statement. As described in the Compensation Discussion and Analysis (“CD&A”), we have designed the compensation arrangements for our named executive officers to provide compensation in overall amounts and in forms that attract and retain talented and experienced individuals and motivate our executive officers to achieve the goals that are important to our growth. Our Board and CNG Committee believe that our executive compensation program is tied to performance, aligns with shareholder interests and merits stockholder support. Accordingly, the Board recommends that stockholders vote in favor of the following resolution:

“RESOLVED, that the stockholders approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed in the Compensation Discussion and Analysis, the compensation tables, and the narrative discussion contained in this proxy statement.”

Because your vote is advisory, it will not be binding on the Board of Directors or the CNG Committee. However, the Board of Directors and the CNG Committee will carefully review the voting results. To the extent there is any significant negative vote on this proposal, we may consult directly with stockholders to better understand the concerns that influenced the vote.

Board of Directors’ Recommendation

The Board of Directors recommends that stockholders vote FOR the approval of the compensation of our named executive officers.

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Proposal 4: advisory vote to Determine frequency of future advisory votes on executive compensation

We are providing our stockholders the opportunity to cast an advisory (non-binding) vote regarding the desired frequency for holding future non-binding advisory votes to approve the compensation of our named executive officers as described in our annual proxy statement.

This proposal gives our stockholders the opportunity to express their views as to whether say-on-pay votes should occur every one, two or three years. Because your vote is advisory, it will not be binding on the Board of Directors. However, the Board will carefully consider the outcome of the frequency vote and other communications from stockholders when making future decisions regarding the frequency of say-on-pay votes.

After careful consideration, the Board of Directors believes that submitting the advisory vote on executive compensation to stockholders on an annual basis is the most appropriate alternative at this time.

The proxy card provides stockholders with four choices (every one, two or three years, or abstain).

Board of Directors’ Recommendation

The Board of Directors recommends that stockholders vote for a frequency of ONE YEAR for future advisory votes on executive compensation.

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EXECUTIVE COMPENSATION

The following provides information about our executive officers.

Lance Mitchell

Mr. Mitchell has served as the Company’s President and Chief Executive Officer since 2011 and as a member of the Company’s Board of Directors since October 2019.  From 2006 to 2011, Mr. Mitchell served as President of Closure Systems International (part of PEI Group from 2008 to 2019). Mr. Mitchell commenced his career in sales and marketing at Owens Corning Fiberglass, progressed to General Management positions at Avery Dennison and Goodrich followed by executive management positions at PolyOne and Alcoa before joining PEI Group in 2008. Mr. Mitchell received a B.S. in Business from Bowling Green State University.

Michael Graham

Mr. Graham has served as the Company’s Chief Financial Officer since 2016.  Mr. Graham joined RCP after serving as the CFO of Graham Packaging (part of PEI Group) from 2011 to 2016.  Prior to joining Graham Packaging, Mr. Graham led and managed several merger and integration activities for PEI and served as CFO of Reynolds Packaging from 2008 to 2010, collaboratively leading the integration of Reynolds Packaging into RGHL. Mr. Graham served as Group Controller and CFO of Alcoa’s Flat Rolled & Extruded Aluminum Group from 2004 to 2007.  From 1986 to 2003 Mr. Graham served in a variety of management positions at Honeywell International Inc. and AlliedSignal, Avaya Communications and General Mills, Inc.  Mr. Graham received a B.A. in Finance from Howard University.

Rachel Bishop

Ms. Bishop has served as the Company’s President of Hefty Tableware since 2019.  Prior to joining RCP, she served as Chief Strategy Officer from 2014 to 2017 and President, Snacks from 2017 to 2019 at TreeHouse Foods, Inc. Ms. Bishop was at The Walgreen Company from 2009 to 2014 where she most recently served as Group Vice President of Retail Strategy.  From 2001 to 2009, Ms. Bishop was at McKinsey & Company, where she worked with consumer businesses on a broad range of sales, marketing, and operational topics with a focus on growth strategy development and implementation.  Ms. Bishop earned a B.S. degrees in Materials Science and Engineering and in Geophysics from Brown University and a Ph.D. in Materials Science and Engineering with a minor in Technology Management from Northwestern University.

Judith Buckner

Ms. Buckner has served as the Company’s President of Presto Products since 2019. She previously served as Senior Vice President, Business Transformation of RCP from 2017 to 2019.  Ms. Buckner first joined RCP in 2000 as an Engineering Manager and has held various other leadership roles including Director of Manufacturing, Plant Manager, Director of Engineering and New Product Development and Vice President of Operations and Engineering.  Her prior experience includes various engineering and leadership roles in product development and operations at Hoechst-Celanese/Invista from 1991 to 2000.  Ms. Buckner earned a B.S. in Chemical Engineering from Purdue University.

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Craig Cappel

Mr. Cappel has served as the Company’s President of Reynolds Cooking & Baking since 2018.  From 2015 to 2018, he served as President of Hefty Tableware.  From 2013 to 2015, Mr. Cappel served as the Chief Procurement and Technology Officer for PEI Group, leading global sourcing and technology across multiple businesses.  From 1997 to 2013, Mr. Cappel was with Pactiv as Vice President of Business Development and Innovation and various other leadership roles across innovation, engineering technology, new business development and business management.  From 1994 to 1997, he served as an engineer at TE Connectivity, Ltd. (formerly Amp Incorporated). Mr. Cappel received a B.S. from the College of Engineering Technology at the Rochester Institute of Technology and an M.S. in Product Design and Development Management from Northwestern University.

Lisa Smith

Ms. Smith has served as the Company’s President of the Hefty Waste & Storage business since 2020.  She previously served as Senior Vice President of Marketing for the Reynolds Cooking & Baking business since 2018, and prior to that was Vice President of Marketing for the Hefty Waste & Storage business from 2015 to 2018.  Ms. Smith first joined the Company in 2009. Her prior experience includes holding marketing, sales and category management roles at CPG organizations including Mars, Sara Lee and Sunstar/GUM.  Ms. Smith earned a B.S. in Marketing from the University of Illinois and an MBA from the J.L. Kellogg Graduate School of Management at Northwestern University.

Stephan Pace

Mr. Pace has served as the Company’s President, Sales and Chief Customer Officer since 2020. Prior to this role, he served as RCP’s President of Walmart/Sam’s and eCommerce since 2015 and RCP’s Chief Customer Officer and Senior Vice President of Sales beginning in 2010. He served as Vice President of Sales for Pactiv’s Consumer Products Division prior to PEI’s acquisition of Pactiv in 2010.  Mr. Pace joined Pactiv in 2001 and held several senior management positions.  Prior to joining Pactiv, he served in a variety of sales and marketing roles at Unilever plc and Procter & Gamble Company.  Mr. Pace received a B.A. in Economics from Wesleyan University.  He serves on the Board of Advisors for Tierra Nueva Fine Cocoa, d/b/a The Whole Coffee Company.

Chris Mayrhofer

Mr. Mayrhofer has served as the Company’s Senior Vice President and Corporate Controller since January 1, 2021 and as the Principal Accounting Officer since April 22, 2020. He previously served as Vice President and Controller for the Company from July 15, 2019 to January 1, 2021. Prior to joining the Company, Mr. Mayrhofer served as Vice President and Corporate Controller of Evergreen Packaging from 2017 to July 2019, Vice President and Corporate Controller of Graham Packaging from 2012 to 2017 and, prior to that, held various financial positons with PEI Group from 2009 to 2012, Performance Food Group Company from 2005 to 2009 and Ernst & Young LLP. He holds a Bachelor’s of Business Administration in Accounting from the University of Richmond and is a Certified Public Accountant.

COMPENSATION DISCUSSION AND ANALYSIS

Introduction

This CD&A describes our compensation approach and programs for our NEOs, which include our Chief Executive Officer, Chief Financial Officer, and our three other most highly compensated executive officers for the year ended December 31, 2020.  Except as otherwise indicated, the information in this section relates to the compensation of our NEOs, and the principles underlying our executive compensation policies, during and for 2020.  Our NEOs for 2020 were:

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The following discussion relates to the compensation of our NEOs whose compensation is disclosed below, as well as the overall principles underlying our executive compensation policies.  

Our Compensation Objectives and Philosophy

Our compensation objectives include attracting and retaining top talent, motivating and rewarding the performance of senior executives in support of achievement of strategic, financial and operating performance objectives and ensuring that our total compensation packages are competitive in comparison to those offered by our peers.  Our NEOs, as well as our employees generally, participate in compensation and benefits plans and programs that are intended to align our compensation programs with our business objectives, promote good corporate governance and seek to achieve our compensation objectives.

To ensure that management’s interests are aligned with those of our stockholders and to motivate and reward individual initiative and effort, our executive compensation program emphasizes a pay-for-performance compensation philosophy so that attainment of enterprise-wide, business unit and individual performance goals are rewarded.  Through the use of performance-based plans that emphasize attainment of enterprise-wide and/or business unit goals, we seek to foster teamwork and commitment to performance.  Further, the use of components such as equity ownership and long-term equity-based incentive compensation programs is important to ensure that the efforts of management are consistent with the objectives of our stockholders.

Risk Assessment of Compensation Programs

Our CNG Committee, based on an evaluation by its independent compensation consultant, does not believe that our compensation arrangements, including financial performance measures used to determine short-term and long-term incentive payout amounts, provide our employees with an incentive to engage in business activities or other behavior that would expose us or our stockholders to risks that are reasonably likely to have a material adverse effect on our company.

Executive Compensation Process

Role of the Independent Compensation Consultant

Following our IPO in early 2020, the CNG Committee assumed responsibility for determining our compensation philosophy, structuring our compensation and benefits programs and determining appropriate payments and awards to our executive officers, including our NEOs.  The CNG Committee is also responsible for implementing, monitoring and evaluating our executive compensation philosophy and objectives and overseeing the compensation program for senior executives.  The CNG Committee’s responsibilities and authority are described fully in its Charter.  Our CNG Committee has engaged Pearl Meyer & Partners, LLC (“Pearl Meyer”), an independent compensation consultant, to advise on compensation matters.

In addition, Pearl Meyer provided an analysis of base salary, annual incentive program (“AIP”) compensation and long-term incentive (“LTI”) compensation for senior executives, comparing them to executives at companies in our peer group (the “Benchmark Comparison Group”) and using compensation survey data for similarly sized organizations in our industry.

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Peer Group

The Benchmark Comparison Group utilized as a benchmark for executive compensation matters for 2020 included:

The criteria considered in selecting peer companies for the Benchmark Comparison Group include the following:

Role of Management

Our CEO, in collaboration with Pearl Meyer and with input from the CNG Committee, makes recommendations to the CNG Committee for base salary, AIP, LTI and any other elements of our compensation program for each NEO (other than the CEO, whose compensation is determined solely by the CNG Committee).  Our CEO also provides recommendations to the CNG Committee on other elements of our compensation program for senior executives, including, for example, the design and metrics under our AIP and LTI programs.  While the CNG Committee will consider the CEO’s recommendations with respect to the compensation of the NEOs, the CNG Committee independently evaluates the recommendations and makes all final compensation decisions relating to the NEOs.

In the case of compensation for employees below the most senior level, the CNG Committee has delegated certain authority to our management to make determinations in accordance with guidelines established by the CNG Committee.

Total Direct Compensation

The CNG Committee, advised by its independent compensation consultant Pearl Meyer, is responsible for overseeing and approving the executive compensation program for the Company’s executive officers, including our named executive officers. To establish the appropriate target total direct compensation for each position, Pearl Meyer provides and the Committee reviews the median total direct compensation based upon our Benchmark Comparison Group.  The Committee then considers the median base salary compensation, median target annual cash incentive compensation and median equity compensation, also based upon our Benchmark Comparison Group, in determining the elements of total direct compensation for each position.

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Elements of Compensation

The components of executive compensation for our NEOs, and the primary objectives of each, are summarized in the chart below:

Because of the ability of our NEOs to directly influence our overall performance, and consistent with our philosophy of linking pay to performance, the compensation programs allocate a significant portion of compensation paid to our NEOs to both short-term and long-term performance-based incentive programs.  In addition, as an employee’s responsibility and ability to affect our financial results increases, base salary becomes a relatively smaller component of total compensation while long-term and at-risk incentive compensation becomes a larger component of total compensation.

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Base Salary

Base salaries are set at competitive levels necessary to attract and retain top-performing senior executives, including our NEOs, and are intended to compensate senior executives for their job responsibilities and level of experience. The CNG Committee has a goal to set each of the elements of total compensation at or around the 50^th percentile of the Benchmark Comparison Group (and, for our presidents of our four business units, the overall general industry), adjusted to reflect each executive’s individual performance and contributions.  However, as there were certain elements of compensation not available to us when we were wholly-owned by PEI, such as equity-based compensation, the CNG Committee recognizes that it will take time before all of the individual elements of total compensation can reach the 50^th percentile goal.  In certain cases, including when an executive is recruited from another company or where it is otherwise appropriate to retain or incentivize an executive, the base salary may exceed the levels indicated in order to attract, and ultimately retain, the executive.

Michael Graham, Stephan Pace, Craig Cappel and Rachel Bishop each received a 3% merit increase, effective June 1, 2020.  Lance Mitchell did not receive a base salary adjustment in 2020.

Annual Incentive Compensation

2020 Annual Incentive Program

Our 2020 annual incentive program (“2020 AIP”) was designed to provide an opportunity for our senior executives, including our NEOs, to earn an annual incentive, paid in cash, based on the achievement of certain financial targets and strategic priorities.  An executive’s incentive target is a percentage of his or her base salary.

The 2020 AIP was designed to motivate our senior executives to achieve annual financial and other business goals based on our strategic, financial, and operating performance objectives. For our senior executives, including our NEOs, 90% of the payout under the 2020 AIP would be determined by 2020 Adjusted EBITDA year-over-year growth (“Adjusted EBITDA Growth”). The remaining 10% would be measured by working capital achievements in 2020. The targets and threshold levels for these performance metrics were set by the CNG Committee in the first quarter of 2020. Based on the combined Adjusted EBITDA Growth and working capital results, a participant could earn up to 200% of the target value.

In the first quarter of 2020, the CNG Committee established the following payout levels that would be associated with the degree to which Adjusted EBITDA Growth was attained for 2020:

The CNG Committee provided that payout levels would be interpolated for results between the threshold and maximum levels.

In the first quarter of 2020, the CNG Committee also established the target amounts to which the resulting percentage payout level would be applied. The target percentage of base salary, and resulting dollar amount, for each NEO was:

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In February 2021, the CNG Committee determined the degree to which the Adjusted EBITDA Growth and working capital goals were attained, and the resulting payout level relative to the target amount for each metric. Based on Adjusted EBITDA Growth and achievement of working capital targets in 2020, the calculated payment was 200% of target, based on the following factors:

The CNG Committee did not exercise any discretion to increase or decrease the amounts payable pursuant to the 2020 AIP as calculated pursuant to the terms as described above. As a result, based on the results as applied to the 2020 AIP as described above, the CNG Committee’s approval resulted in the payment of the following amounts to our NEOs under the 2020 AIP:

The amounts paid to our NEOs pursuant to the 2020 AIP are set forth in the “Non-Equity Incentive Plan Compensation” column of our 2020 Summary Compensation Table, because the outcomes with respect to the relevant targets under the objectives were substantially uncertain at the time the targets were established by the CNG Committee and communicated to the NEOs.

IPO Success Transition Plan

In connection with our IPO, we entered into agreements with our NEOs and certain other key executives. The IPO Success Transition plan was implemented to further ensure leadership continuity, and its objectives were to retain executives through the IPO and beyond. Amounts under the plan were to be paid in two instalments. If the executive resigned or was terminated for cause before the end of the transition period, the executive would have been required to repay any instalments which had already been paid to him or her.

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The IPO Success Transition payments were made as indicated below. No further payments are due. The following amounts are included in Summary Compensation Table in the “Bonus” column.

Long-Term Incentive Compensation

Equity Awards Granted in 2020

In connection with our IPO, we also entered into equity retention agreements with our NEOs and certain other key executives. The retention plan was implemented to further ensure leadership continuity, and its objectives are to retain executives through the IPO and beyond.

On February 4, 2020, we issued the IPO RSUs to the NEOs and certain other persons under the Equity Incentive Plan. The RSUs vest over a three-year period, with 1/3 vesting each year, beginning on the first anniversary of the date of grant. Each of these executives must remain an employee on the applicable vesting date to receive shares underlying the vested RSUs.

In addition to the IPO RSUs, the LTI program for 2020 consisted of RSU and PSU awards. The CNG Committee believes that this mix emphasizes performance, further aligning with our stockholders’ interests, and promotes retention. The RSUs vest over a three-year period, with 1/3 vesting each year, beginning on the first anniversary of the date of grant. The PSUs will be earned based on the extent to which specified performance metrics established at the date of the grant are achieved, which for the PSUs granted in 2020 include earnings per share growth over the 2021-2022 period and Adjusted EBITDA growth over the 2020-2022 period. The earnings per share performance factor is weighted at 50% and the Adjusted EBITDA performance factor is weighted at 50%. Participants will have the ability to earn 50% of the target number of PSUs for achieving threshold performance and 200% of the target number of PSUs for achieving maximum performance. The number of PSUs earned, if any, will vest on the third anniversary of the date of grant.

The number of RSUs and the target number of PSUs granted to our NEOs in 2020 were as follows:

PEI LTIP

Prior to the IPO, a small number of key executives, including our NEOs, participated in a cash-based long-term incentive program (“PEI LTIP”) established by PEI and designed to provide the participants an opportunity to earn incentive awards tied to sustained Adjusted EBITDA Growth over a three-year term.  Pursuant to the PEI LTIP, participants received a grant at the beginning of a three-year performance period that could be earned over such period in annual instalments based upon the attainment of certain Adjusted EBITDA Growth metrics set at the beginning of

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the period.  Each grant provided for a “Target Opportunity Award” (based on a percentage of base salary) that could be achieved over the three-year period. The performance results achieved in the first year of the three-year period established the total amount of the award (which was expressed as a percentage of the Target Opportunity Award) that could be payable over the specified three-year period. If actual performance did not meet the performance threshold level in the first year, the participant was no longer eligible to earn any amount over the three-year period.  If actual performance did meet the threshold in the first year, the participant would receive the first payment, but the second and third payments depended on performance results in the second and third years.

No new grants have been or will be made under the PEI LTIP after our IPO.  However, 2020 was the third year in the three-year period covered by the 2018 grant under the PEI LTIP, and was the second year in the three-year period covered by the 2019 grant under the PEI LTIP.  With respect to the 2018 grant, Adjusted EBITDA Growth in 2018 resulted in a payout equal to 72% of the target value, and therefore a participant could earn one-third of their Target Opportunity Award multiplied by 72% in each year of the three-year performance period. For 2020, the third year of the performance period under the 2018 grant, the full one-third was earned. With respect to the 2019 grant, Adjusted EBITDA Growth in 2019 resulted in a payout equal to 101% of the target value, and therefore a participant could earn one-third of their Target Opportunity Award multiplied by 101% in each year of the three-year performance period. For 2020, the second year of the performance period under the 2019 grant, the full one-third was earned. The amounts paid to our NEOs pursuant to the PEI LTIP are set forth in the “Non-Equity Incentive Plan Compensation” column of our Summary Compensation Table, because the outcomes with respect to the relevant targets under the objectives were substantially uncertain at the time the targets were established.

Other Compensation—Retirement and Welfare Benefits

Retirement and welfare benefit programs are a necessary element of the total compensation package to ensure a competitive position in attracting and retaining a committed workforce.  Participation in these programs is not tied to performance.

Our specific contribution levels to these programs are adjusted annually to maintain a competitive position while considering costs.

Employees who are at a designated salary grade or above, including all NEOs, may defer a portion of their salary and bonus each year into a nonqualified deferred compensation plan, which is a tax-deferred plan. We also make contributions to this plan mirroring percentage contributions made to the 401(k) plan. This program is intended to promote retention by providing a long-term savings opportunity on a tax-efficient basis.  The amounts deferred are our unsecured obligations, receive no preferential standing, and are subject to the same risks as any of our other unsecured obligations.

We provide the NEOs with limited perquisites and other personal benefits, including reimbursement of relocation costs. Additionally, we purchase tickets to various cultural, charitable, civic, entertainment and sporting events for business development and relationship building purposes, and to maintain involvement in communities in which we operate and our employees live.  Occasionally, our employees, including the NEOs, make personal use of tickets that would not otherwise be used for business purposes.  The CNG Committee periodically reviews the levels of perquisites and other personal benefits provided to our NEOs. The CNG Committee intends to maintain only those perquisites

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and other benefits that it determines to be necessary components of total compensation and that are not inconsistent with stockholder interests.

Employment Agreements

We have entered into employment agreements with each of our NEOs.  The employment agreements provide for an initial base salary and an annual cash target incentive percentage, which may be adjusted from time to time by the CNG Committee.  Other key elements of these agreements are outlined below.

Equity Incentive Plan

The purpose of the Equity Incentive Plan is to motivate and reward our employees, directors, consultants and advisors to perform at the highest level and to further our best interests and those of our shareholders.  

Administration

Our CNG Committee administers the Equity Incentive Plan. To the extent not inconsistent with applicable law, our CNG Committee may delegate to one or more of our officers some or all of the authority under the Equity Incentive Plan, including the authority to grant all types of awards authorized under the Equity Incentive Plan, except for grants to executive officers.

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Eligibility

Generally, all employees, directors, consultants or other advisors of the Company or any of its affiliates are eligible to receive awards.

No Repricing

Except as provided in the adjustment provision of the Equity Incentive Plan, no action will directly or indirectly, through cancellation and regrant or any other method, reduce, or have the effect of reducing, the exercise price of any option or an SAR established at the time of grant thereof without approval of our shareholders.

Director Pay Cap

Subject to the adjustment provision of the Equity Incentive Plan, an individual who is a non-employee director may not receive awards, in cash or otherwise, for any calendar year that total more than $750,000 in the aggregate.

Anti-Hedging and Anti-Pledging Policy

Our employees and directors are prohibited from (i) engaging in any hedging transactions (including transactions involving options, puts, calls, prepaid variable forward contracts, equity swaps, collars and exchange funds or other derivatives) that are designed to hedge or speculate on any change in the market value of the Company’s equity securities, and (ii) pledging Company securities in any circumstance, including by purchasing Company securities on margin or holding Company securities in a margin account.

Clawback Policy

We have a Compensation Recoupment Policy that permits us to recover from our executive officers incentive-based compensation received by him or her during any of the three years completed before any financial restatement trigger date. In the event of a financial restatement, if the amount of incentive compensation actually paid to an executive officer exceeds the amount of such compensation that would have been paid as calculated based on the financial restatement, the CNG Committee may seek to recover from such executive for the benefit of the Company an amount equal to the excess of the awarded compensation over the adjusted compensation.

Tax and Accounting Considerations

Tax Considerations of Our Executive Compensation

Section 162(m) of the Code generally limits the tax deductibility of annual compensation paid by public companies for certain executive officers to $1 million. Although our CNG Committee is mindful of the benefits of tax deductibility when determining executive compensation, the CNG Committee may approve compensation that will not be fully-deductible in order to ensure competitive levels of total compensation for its executive officers.

Accounting for Our Stock-Based Compensation

We account for stock-based payments, including grants under each of our equity compensation plans, in accordance with the requirements of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718.

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COMPENSATION, NOMINATING AND CORPORATE GOVERNANCE COMMITTEE REPORT

The Compensation, Nominating and Corporate Governance Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based upon this review and discussion, the Compensation, Nominating and Corporate Governance Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

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SUMMARY COMPENSATION TABLE

The following table sets forth information concerning the compensation paid to our NEOs during our fiscal years ended December 31, 2020, 2019 and 2018.

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The following table presents the grant date fair value of the RSUs included in the stock awards column above, as well as the grant date fair value of the PSUs and the grant date fair value of the PSUs assuming that the highest level of performance conditions would be achieved:

Awards under the 2020 AIP were as follows:

Awards under the 2019 AIP were as follows:

Awards and payments under the prior PEI LTIP are set forth on the tables below. The first table shows the Target Opportunity Award for each NEO based upon performance results in prior years (expressed as a percentage). The amount reflected is the maximum amount that can be earned for such grant cycle. There was no PEI grant in 2020.

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Years two and three of prior grants are contingent on the business meeting its performance goals. The second table shows the payouts (and for 2021, potential payouts) for each of the grants.

(5)   Represents the aggregate change in the actuarial present value of the accumulated benefit under the legacy entitlements under the Pactiv Evergreen Pension Plan for each of Mr. Pace and Mr. Cappel (the only two NEOs who are participants in such plan), from December 31, 2019 to December 31, 2020 for the 2020 amounts and from December 31, 2018 to December 31, 2019 for the 2019 amounts.  In 2018, there was a decrease in the value of plan benefits for Mr. Pace and Mr. Cappel ($22,845 and $23,846, respectively), so these values are reported as $0.  

No NEO received above market or preferential earnings on deferred compensation in any of the years indicated.  In the Summary Compensation Table included in Part III, Item 11 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, amounts were shown for each NEO for the 2019 year that included earnings on deferred compensation that were not above market or preferential.  The 2019 amounts in this column in the table above remove those amounts, as they are not required to be disclosed in this table.  As a result, the amounts in the “Total” column for 2019 have been reduced by the same amount.

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The following table presents our contributions to the 401(k) Retirement Plan and the Nonqualified Deferred Compensation Plan for the 2020 year.

The applicable amounts for the 2019 year were as follows:

Other benefits reported under All Other Compensation include group life insurance and wellness credits.  Health and welfare benefits are not reported to the extent these benefits are generally available to all other salaried and non-union hourly employees.

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2020 GRANTS OF PLAN-BASED AWARDS

The following table sets forth information regarding grants of plan-based awards to our NEOs during 2020.